You have to differentiate between the different types of bans in Germany.

The one ban Crying Freeman was under is called "Index" (blacklist) and it means that a film is harmful for consumation by youths. If a movie is blacklisted, it is prohibited to advertize or sell it openly in public (as well as online).

Then there is an actual ban (which is issued by a court if it deems a movie to be so violent that it actually violates German law). Such titles are prohibited to be sold altogether. The 1978 "Dawn of the Dead" is an example for such a movie.

Yes, and that is/was correct. A ban does not make it illegal (in general), there are restrictions, e.g. no advertising, sales to adults only etc. Violation of these restrictions is a crime (penal law). A film becomes illegal when it violates e.g. §131 of German penal law, resulting in a confiscation.